Paytm delivered its third consecutive profitable quarter in Q3 FY26, reporting a Profit After Tax (PAT) of ₹225 crore, a sharp year-on-year improvement of ₹433 crore. This marks a steady rise from ₹123 crore in Q1 FY26 and ₹21 crore in Q2 FY26, highlighting consistent earnings momentum. EBITDA rose to ₹156 crore with a 7% margin, driven by stronger monetisation, even after accounting for higher consumer promotions and the full impact of the new labour code.
Strong Revenue and Contribution Growth
Operating revenue for the quarter increased 20% YoY to ₹2,194 crore, led by higher payments GMV, merchant subscriptions, and financial services distribution. On a like-for-like basis, revenue growth stood at around 25%. Contribution profit climbed 30% YoY to ₹1,249 crore, with contribution margins expanding to 57%, supported by improved payment processing margins and a higher share of financial services revenue.
Payment services revenue grew 21% YoY to ₹1,284 crore, while net payment revenue jumped 25% YoY to ₹613 crore. The company benefited from better processing margins and a growing base of merchant subscriptions. Monthly transacting users reached 7.6 crore, adding 60 lakh users over the past year, reflecting improved engagement through AI-driven, product-led growth initiatives.
Paytm continued to deepen its presence across offline and online merchants. Merchant device subscriptions rose to 1.44 crore, an addition of 27 lakh devices YoY, strengthening its recurring revenue base. AI-led merchant acquisition and better sales execution helped improve unit economics and merchant retention during the quarter.
The company recorded three consecutive quarters of UPI market share gains, with consumer UPI GMV growing 35% over the last nine months, significantly outpacing industry growth of 16%. Strategic promotional spending supported user retention, while new monetisation avenues such as wealth products, travel, consumer loans, and advertising aimed to boost long-term customer value.
Revenue from financial services distribution increased 34% YoY to ₹672 crore, driven by merchant loans and wealth offerings. The number of users availing financial services rose from 5.9 lakh to 7.1 lakh, despite lower disbursements under default loss guarantee (DLG), which also reduced associated costs.
Indirect expenses declined 8% YoY to ₹1,092 crore, supported by lower employee-related costs and reduced provisions for doubtful debts. Paytm ended the quarter with a cash balance of ₹12,882 crore, providing ample financial flexibility to invest in growth while maintaining balance sheet strength.
